Moving from Billing Customization to Consolidation is Smart Business

Technological advancements (such as IP multimedia subsystems), industry mergers and acquisitions, more stringent government regulations and heightened customer expectations impact the billing environment as much as or more than any other aspect of the operator’s business. And because it’s the touch point to the customer and the cash register, the billing environment had better keep pace by facilitating rapid introduction of new products and promoting secure access to targeted billing data by customers, partners and organizations throughout the operator’s enterprise.

With so much at stake, customized solutions that shore up the legacy environment are insufficient over the long haul. Operators should consider moving beyond billing customization to billing consolidation—rationalizing, simplifying and streamlining disparate billing systems—to increase efficiency, reduce the total cost of ownership and capture new revenue streams.

Make no mistake: Achieving the simplicity of consolidation is not simple. Success hinges on developing and executing a strategic roadmap that clearly marks the path from the current underachieving environment to a high-performance, measurable solution. Before diving head-first into consolidation, operators must take care to lay the groundwork through a rigorous examination of their current environment and detailed analysis of the full impact of a migration to consolidated billing. Because billing consolidation is a major undertaking with far-reaching ramifications, careful research and planning are essential.

Planning—Lay the Groundwork

Billing customizations are often executed with a focus on the billing system itself. Because downstream impact is minimal, the risks of a plan that jumps straight into system integration are mitigated. Consolidation, by contrast, can have enterprise-wide impact. As a result, it’s crucial to approach consolidation with a macro-level mindset. A comprehensive plan that identifies all affected personnel, vendors, systems and infrastructure is crucial, and must take the following five factors into account:

Examine Processes and Data First

To identify the constituents that will be affected by the consolidation, operators must carefully assess the business processes and data associated with service definition, service fulfillment and ongoing service assurance. Process and data interdependencies have the potential to produce upstream and downstream impacts—both internally and externally—throughout the consolidation effort. Documenting and prioritizing process and data flows illustrates which systems, infrastructure and people interact directly and indirectly with the billing environment.

Furthermore, processes may be duplicated, sub-optimal, inaccurate, or simply outdated. On the data side, the purview should extend beyond data conversion into data validation, cleansing and mapping (including naming conventions, field identifiers and translation issues), which in turn provides the springboard to audit the data for billing irregularities.

Sanity-checking old processes long assumed to be essential can pay unexpected dividends, by eliminating unnecessary processes. As an example, a Tier 1 wireless operator recently assessed its BSS/OSS environment and estimated that more than one-third of its processes had been implemented in order to support bolt-on changes dictated by the technology platform.

During the assessment, the wireless operator quantified the “elimination list” of processes, the majority of which involved ordering/provisioning workarounds or outdated finance related processes. As the consolidation progressed, it carefully assessed any possible downsides from eliminating old processes. One that arose: The finance organization had initial resistance to the changes in practices related to the new processes. But over time, as the benefits of the consolidation became more evident, such resistance fell away. Today, the billing consolidation is viewed as major factor driving improved efficiency. Streamlined processes within the new BSS/OSS are translating to increased agility and to millions of dollars of savings on a quarterly basis.

Expand the Functional Scope Beyond Billing

Functional areas immediately congruent to billing, such as mediation, financial applications and customer service management, are obvious candidates for impact analysis. Expanding the scope to consider the bigger picture is vital, particularly when considering integration impacts that can affect functional areas from order entry to inventory and provisioning. The effort pays off.

Identify and Include All Stakeholders

Billing system consolidation affects more than just the personnel responsible for the system. Other operations staff, sales, marketing, customer service representatives, third-party partners and customers are all touched by the consolidation activity and should be involved throughout the consolidation life cycle to promote success. For instance, marketing must understand how to illustrate the additional value to customers, while customer service representatives must be prepared to answer customer concerns and educate them on the benefits of the consolidation—before, during and after execution.

Optimize Infrastructure—Carefully Billing system consolidation offers the opportunity to optimize infrastructure (servers, CPUs, memory, operating systems, administration, etc.), which can decrease the total cost of ownership, minimize maintenance and improve performance through increased resource headroom and soft partitioning techniques. At the same time, care must be taken to avoid creating a single point of failure, while also accounting for additional dependencies for backup and restore, disaster recovery, and software and operating system upgrades.

The consolidated infrastructure must be architected to allow for runtime diversity during and after the consolidation effort, and right-sized to ensure that cost savings are realized without hurting performance. By optimizing the infrastructure as part of the consolidation effort, operators can address the key aspects of their business plan and bring about a technological shift to a more service-oriented architecture, positioning them to meet future service needs from a business support systems perspective.

Look to the Future

Process and data analysis can do more than provide the macro-level view critical to consolidation success—it gives an operator the chance to strategically compare its current environment and plans against future operating scenarios to ensure adequacy and completeness. These scenarios should consider potential merger and acquisition activity; regulatory requirements, such as Sarbanes Oxley and data privacy concerns; and next-generation product and service content and real-time performance mandates.

In one case, a Tier 1 operator had long sought to improve efficiencies in business processes and in operations, and had seriously considered a major billing consolidation initiative. Opportunity—in the form of new laws governing data privacy—provided the incentive to pursue this broad objective. Recently enacted data privacy legislation made it an imperative to comply with requirements for data protection. In parallel, the operator had always sought to improve efficiency in business processes and in operations. Prompted by both motives, the operator initiated the billing consolidation method.

One of the first objectives: a review to holistically analyze approximately 200 BSS/OSS applications and their associated processes to assess the impacts of the new data privacy legislation. The operator-structured methodology for BSS/OSS integration was applied in order to assess the overall implications.

In most cases the data privacy needs mapped to a handful of the applications. In several cases, retiring the system was deemed viable based on the encapsulated nature of the application. Many times, however, the changes required were left to the legacy system in order to reduce risks and cost based on the embedded nature of the functionality. Lastly, initial analysis was done to determine possible relocation of all privacy data to a single, centralized database.

As a direct result of following the billing consolidation method, the operator reaped important results in its data privacy objective: the ability to limit database encryption and backup tape encryption, which were approximately 30–50 percent of the project costs. A key systemic benefit of the consolidation was that the operator now can systemically identify changes required in tandem with synergies to the overall BSS/OSS platform. But the gains relevant to the data privacy portion alone made the consolidation worthwhile.

Of the applications containing privacy data, 7 percent were retired after analysis showed that they were either no longer in use or could be moved to another application with similar data. An additional 20 percent were withdrawn from the scope of the data privacy legislation altogether by simply eliminating most privacy data—a move that reduced the operator’s risk of exposure and cut remediation costs.

Mobilize, Measure, Model—and Validate

With the preparatory groundwork completed, the way is clear to execute billing consolidation. Implementation should be accomplished by following a framework that includes mobilization, measurement and model.

Mobilization means putting the right team in place to actively participate in the consolidation effort, including all stakeholders identified during the groundwork phase. In addition, consultants are an important part of the mix, because they bring experience across a variety of environments, helping operators address known problems, as well as issues they “may not know that they don’t know.” As independent third parties, consultants also can arbitrate and champion change, showing any resistant stakeholders how taking ownership of the consolidated solution will increase their value to the enterprise.

Measurement establishes the quantifiable metrics that will define billing system consolidation success. Some of the key performance indicators include revenue recognition (order-to-cash cycle metrics), product and product bundle profitability, customer profitability, process reduction and streamlining, and operational efficiency (detection of fraud, erroneous billing and revenue leakage).

The model is the heart of a disciplined, repeatable framework for capturing and executing the tasks necessary to create and implement the billing system consolidation. With the team and measurements in place, the model provides a template to show what the consolidated solution can do across a range of scenarios—including anything that can go wrong. The model leverages the baseline “as-is” architecture assessment and the “to-be” architecture plan that considers all future requirements and operating scenarios. It also maps out contingencies to ensure that billing system functionality and customer service are never compromised during the transition. Rerating, backout billing and taxation correction are among the issues that must be addressed.

Before taking the consolidated billing solution live, the operator must take one last step: thoroughly validate all systems, infrastructure, processes and data. Validation testing should span historical, current and anticipated data, and put backup and disaster recovery systems through their paces.

Comprehensive testing reveals any unanticipated problems, which sometimes arise in the strangest places. During its validation phase, a satellite-based operator serving rural markets learned that its error handling process was itself introducing errors. Because the operator had a well-devised validation plan and the participation of all stakeholders, it was able to identify and immediately resolve the problem, which otherwise would have rippled all the way to its order entry systems.

Achieving Consolidation Success

Consolidation is a major undertaking, but it’s smart business in the long and the short term. As competition fuels the market for complex bundled services, operators have little choice but to ensure that the billing environment can support the demand. Consolidation is the best course. A strategic roadmap shows the way, boosting the speed of deployment and performance of the end result—eliminating any problems that might arise before the system takes wing.

A consolidation “to-do” list can help operators stay on track (see sidebar) to tame consolidation and reap its benefits, including reduced total cost of ownership of systems, reduced infrastructure cost, more efficient processes, rationalized systems and data, more productive personnel, and improved customer relationships and retention. The result is a next-generation billing environment that contributes to the bottom line today and positions the operator for continued growth in the future.

Randy Mysliviec is senior vice president of professional services for the Information Management Group (IMG) at Convergys Corp. Convergys uses its portfolio of professional and consulting services, Infinys software, and technical and operational expertise to solve clients’ complex BSS and CRM business problems.